Any down side to paying a mortgage off?
Discussion
I got rid of mine at the earliest. 
I'm in the Old Merc school of thought, the feeling of financial freedom is great.
There is an argument to have a nominal balance and keep you're mortgage live. If you have a flexible mortgage you can then get your hands on a chunk of dough easily if required.
I'm in the Old Merc school of thought, the feeling of financial freedom is great.There is an argument to have a nominal balance and keep you're mortgage live. If you have a flexible mortgage you can then get your hands on a chunk of dough easily if required.
Surely it depends on the differential interest rates. If you're paying, say, 5% p.a for the interest only mortgage but your cash pile is only earning 1% invested then it's a bit of a no-brainer to pay off the mortgage.
If, however, you're paying 1% on the mortgage and you can safely earn, say, 3% with the cash invested then keep the mortgage (even after allowing for 40% marginal tax rate on investment income).
If, however, you're paying 1% on the mortgage and you can safely earn, say, 3% with the cash invested then keep the mortgage (even after allowing for 40% marginal tax rate on investment income).
I've done it, it is a great feeling. However, there are downsides.
Firstly, depending on your circumstances, it might leave you cash poor. Just think about whether you might need some cash sloshing around in your bank for anything (new car, money to start a business, to carry out work on the house, to lend to your kids).
Secondly, it will make it harder to remortgage quickly and release equity, if you needed to.
Thirdly, assuming you are paying a decent rate, mortgages are quite a relatively cheap way of borrowing money, Would you regret it in a few years time when you need some cash and find that rates have gone up?
For me, it was the right thing to do, and it's something i'd generally recommend, but you should think hard about your circumstances before you do it.
Firstly, depending on your circumstances, it might leave you cash poor. Just think about whether you might need some cash sloshing around in your bank for anything (new car, money to start a business, to carry out work on the house, to lend to your kids).
Secondly, it will make it harder to remortgage quickly and release equity, if you needed to.
Thirdly, assuming you are paying a decent rate, mortgages are quite a relatively cheap way of borrowing money, Would you regret it in a few years time when you need some cash and find that rates have gone up?
For me, it was the right thing to do, and it's something i'd generally recommend, but you should think hard about your circumstances before you do it.
As for credit score a mortgage is only one aspect providing of course that you have lots of other lines of credit and bills then it's not going to affect it so much plus the financial freedom must be nice. I'd be inclined to leave a tiny bit though a few hundred quid spread over 5 years just to annoy the bank a little.
Very definitely this. Thanks all. Ok, looks like I will pay it off and join the other smug gits, the Aston will have to wait!
BoRED S2upid said:
I'd be inclined to leave a tiny bit though a few hundred quid spread over 5 years just to annoy the bank a little.
lol, thats a neat idea, but as I've never managed to get one over on my bank, I would expect them to have that covered in the very, very, small print buried in the small print, there must be some way for them to win under every circumstance.. Salterns said:
lol, thats a neat idea, but as I've never managed to get one over on my bank, I would expect them to have that covered in the very, very, small print buried in the small print, there must be some way for them to win under every circumstance..
I've got an account an ISA I think with Santander which I asked to be closed it's still got something daft like 5p in it they wrote to me every year I'm going to leave it there forever let them keep sending me statements. Enjoy being smug it's going to be great to have that paid.
BoRED S2upid said:
I've got an account an ISA I think with Santander which I asked to be closed it's still got something daft like 5p in it they wrote to me every year I'm going to leave it there forever let them keep sending me statements.
lol, I think thats brilliant! 
...btw, I'll be debt free at 47.... oh look, I'm a snug git already!
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